To get the interior of the country to be transparent, I used the blending mode. Each blending mode uses different rules for what it makes transparent. In this case, I used "darken," which causes any pixels in the selected layer that are lighter than pixels underneath it to become transparent. Since white is lighter than everything, all the white will vanish when the layer is set to darken.

Conversely, if you fill the country with black and set it to "lighten," you'll get the same result--lighten turns pixels transparent if they're darker than what's underneath.

Here's where you set the blending mode:
Click image for larger version.  Name: 007.jpg  Views: 156  Size: 85.3 KB  ID: 9728

There's an excellent tutorial on Photoshop's blending modes at cgtextures.com:
http://www.cgtextures.com/content.ph...ame=blendmodes

It should fully apply to the Gimp, as well. I highly recommend reading through it, as it's a very powerful feature for mapping and texturing.